My parents own a home that they purchased for $20,000 in 1970. They moved out of this home in 1993. They have been renting this home since. They now wish to sell this rental property that is now worth about $170,000. They are nearing retirement age. I have heard (and know little ) about a situation where you can swap "like" real estate holdings.

It's a section 1031, or "Starker," exchange. You sell one piece of property (in this case rental real estate) and buy a like property (another piece of rental real estate). If you jump through all the hoops you defer your capital gain.

It doesn't sound on the surface like this would meet your parents' needs, but if they want to investigate it a commercial real estate broker should be able to give them some information.